Great Portland Estates buys two prime London properties

Great Portland Estates has paid Henderson Global Investors £39m for the head leasehold interest in two prime central London properties – French Railways House in Piccadilly and 50 Jermyn Street.

It said the two adjacent buildings – both built in the 1950s and owned by The Crown Estate  – offered a “superb development opportunity” over the longer term.

Chief executive Toby Courtauld said Great Portland Estates (GPE) expected to grow the properties’ yield from 5.1% to 7% over the next two years through “imminent lease events” and focused asset management.

GPE said the properties’ 49,879 ft2 of office and retail accommodation was “underdeveloped”. The leases are due to expire in 2053 and 2057.

Nick Deacon, director of property at Henderson Global Investors said the sale of the properties formed part of a strategic repositioning of the fund. 

“The proceeds will be reinvested into CLOF 1’s development programme over the near term, including the fund’s joint venture with Istithmar P&O at Regent Quarter in King’s Cross, the proposed redevelopment of 54-57 Great Marlborough Street in Soho and Bishop’s Court in Spitalfields,” he said.

Deacon said deploying capital into the development and refurbishment activities was a prudent and cost effective course of action at a time when the London office investment markets were “challenging”.